Audit Scotland reports suggest that Shetland Islands Council is performing well

The council is on stable financial footing and is working hard to ensure future financial sustainability.

That was the message conveyed to councillors on Wednesday by Audit Scotland at a meeting of the special audit committee.

In a report, delivered by Audit Scotland assistant director David McConnell, the council was given a clean bill of health.

The report said the council had “strong” financial management, will be financially sustainable for the “foreseeable future”, has a “strong governance structure” and has an “appropriate governance structure in place to identify and report on any areas of weakness”.

Committee chairman Allison Duncan welcomed the report, saying that the council had “come on a long journey” since 2007, when he was vice-chairman of the audit and scrutiny committee.

Mr Duncan told members the former council was “a rudderless ship” which was “on a roller-coaster of spend, spend, spend.”

He said that this left the current council in a tough position, having to work hard to get spending “under control”.

Despite the “favourable” report Mr Duncan went onto confess that he had “concerns for the future” because of the cuts being handed down to local authorities by the Scottish government.

He said that the next batch of councillors were “going to have to find substantial savings” much as the current council has had to.

Reduced funding for council authorities in Scotland sparked further debate later in the meeting when Mr Duncan questioned why Shetland has seen the biggest drop in funding of any Scottish council.

During the 2015/16 financial year revenue funding to councils in Scotland was reduced by 3.4 per cent, but in Shetland the reduction was 5.1 per cent.

Mr Duncan questioned why Shetland had been hit the hardest and was told by the executive manager of finance Jonathan Belford that it was the result of the Cosla funding formula.

Mr Belford said that it was a complex formula which considers “dozens of indicators to generate the whole.”

Deputy leader of the council Michael Stout then said that he felt Shetland “shouldn’t have a chip on its shoulder” over receiving marginally less funding this year when they had in the past received marginally more.

However, this comment did not satisfy councillor Amanda Westlake who said: “I find it concerning that as one of the smallest council authorities in Scotland we have been hit the hardest.”

The reports from Audit Scotland were later discussed at a meeting of the full council.